Issues for landowners to consider when talking to electricity companies – particularly when buying, selling or developing.

When considering buying, selling or developing land, landowners may need to liaise with an electricity company. This may be in the context of an existing supply and apparatus or in relation to a new electricity connection.

It is likely that an electricity company will require an easement rather than a wayleave agreement. Why? What’s the difference?

If properly registered, an easement is permanent. A contractual wayleave usually allows a landowner to terminate the wayleave by serving notice on the electricity company.

Although a landowner may therefore be tempted to agree to a contractual wayleave rather than an easement – to allow for maximum flexibility – it isn’t as simple as that. Even though a landowner may have served notice on an electricity company to end the contractual wayleave, an electricity company has a right to apply to the Secretary of State to claim a statutory wayleave. If successful this replaces any contractual wayleave which a landowner and an electricity company may have entered into. For public policy reasons a statutory wayleave, in favour of an electricity company, gives that company security of tenure i.e. a permanent right. Any sale, purchase or re-development will take subject to such rights and apparatus and this may affect land values.

Whilst an electricity company must compensate a landowner for the grant of this statutory right, landowners should bear this in mind – particularly from a time and cost perspective and when negotiating sale and purchase prices.